that does sound right to me. My chipped ALH is fun. Not fast AT ALL, but fun. I'm sure a chipped 1.8t would walk away from a tuned ALH, but the diesel has a really fun power delivery. I have been daily beating my chipped mk4 jetta wagon for 100k and I still enjoy a spirited drive over the mountain with it.
Honestly, if any audi should have a diesel in it, its yours! It just fits the overall scheme perfectly.
My big turbo TDI in my audi is knocking on the door of quick and is VERY fun.
It shouldn't be too much more work than a 1.8t, the kicker is the transmission, but the sub-1000 TDI 01e isn't too bad.